THE NEW LOAN.

Taranaki Daily News, Volume LV, Issue 50, 17 July 1912, Page 5

THE NEW LOAN.

INTERESTING PARTICULARS,

By Telegraph—Parliamentary Reporter, Wellington, Last Night.

The following interesting article regarding the recent loan appears in tonight's Post. By the mail which arrived last night the Post's London correspondent supplies information about the flotation of the £4,500,000 loan, for which critics of the Government asked in vain a fortnight ago. The late Minister of Finance, Mr. Ai M. 'Myers, said tin June 28, during the debate on the Imprest Supply Bill, that a sum of £2,■285,000 was" for loans maturing on July 2. When Mr. Myers had read a list of the authorisation's for amounts totalling approximately £4,500,000, Sir Joseph Ward asked what amount of these allocations was for renewal of loans, and Mr. Myers replied, "None." In our com* ment at the time we gave an opinion that Mr. Myers was drawing distinctions between six and half-a-dozen, and the letter from London to-day does show that he was word-splitting. The prospectus issued from the High Commissioner's office, under date June 7, over the signature of Mr. C. Wray Palliser (who has been acting in the place of Sir William Hall-Jones), states that "of the proceeds of this loan the sum of £2,840,500 will be utilised for the repayment of debentures issued under the previously specified Acts, and the balance for the building of the new Dreadnought cruiser, construction and improvement oi railways, roads and bridges; goldflelds development, for other public works required for the development of land settlement, in respect to purchase of native lands, and for advances to settlers and workers." A leaflet issued On the same day by the Bank of England states: "Of the proceeds of this issue the sum of £2,840,500 will be utilised for the repayment of sums temporarily borrowed to provide for the redemption of debentures previously issued under the abovementioned Acts, and £459,500 under the Naval Defence Act, 1909, to meet the payments in respect of the New Zealand Dreadnought cruiser now ander construction. A comparison of these statements shows up the .six and half-a-dozen aspect of Mr. Myers' two statements to which we have referred. In the list of authorisations given by Mr. Myers on July 2 the Naval Defence Act figured for only £IOO,OOO, but it is now apparent that the sum obtained under that heading i 3 £459,500. The late Minister declared a fortnight ago, when the Post's London correspondent's letter had travelled three-quarters of its journey, that he was not in a position to indicate what proportion of the loan would be for actual expenditure on public works in New Zealand. It now seems that the maximum for purposes not connected with repayments and the Dreadnought, cannot exceed £1,200,000. "Some of the papers," remarks the Post's correspondent, "are pointing out that, with underwriting charges included, the money is costing 4% per cent." The probability, as we have already explained, is that these "New Zealand Government 3y s per cent debentures, price of issue £99 per cent.," as the Bank of England leaflet has it, will cost at least 4% per cent, when all the charges are included. It may be that the money ring to which Sir Joseph Ward guardedly referred would not permit the late Government to make any better terms, but the fact remains that this expensive deal in short-dated debentures is a sharp reminder of the costly short-dated practice of recent years. "For some years past," commented the Daily Mail when the prospectus was published, "the Dominion's issues in this country have consisted of short term securities, though not so .short as those now to be offered." Members of the new Government (when in Opposition) roundly condemned this hand-to-mouth system of finance, and they offered sound argument for a change. The public will now naturally look for an amendment.